Birmingham-based Sterne Agee Asset Management pays Gov. Don Siegelman's personal stockbroker a third of its fees for managing a state insurance fund's investments, and 40 percent of what it earns by overseeing investments of a small sub-agency called the Alabama Research Institute, state records show.

Contracts and state documents that include required disclosures by Sterne Agee describe the 34-year-old Trava Williams variously as a solicitor of business, a consultant/lobbyist and a relationships manager hired by the firm.

None of the records show that Williams was to participate in investment decisions or be involved in managing state funds. Although retained by the firm, he was not, and is not, an employee of the firm.

In 1999 and 2000, the firm - a subsidiary of the highly regarded investment company Sterne, Agee & Leach, which has offices around Alabama - hired Williams to assist in winning what now appears to be a total of four state investment management contracts. At that time, he was a business partner of then-Siegelman aide Nick Bailey, according to corporation records.

Records show Bailey as the administration official most involved in suggesting to the four agencies that they contract with Sterne Agee and replace firms that had been managing their money for years.

"Nick Bailey told me to prepare a contract with Sterne Agee ASAP," states a handwritten report, dated May 9, 2000, sent to Terri Adams, who'd recently been put in charge of the Alabama Research Institute.

At the time, Bailey - who held a several titles during this administration - was acting director of the Alabama Department of Economic and Community Affairs.

Russell Moore, the ADECA official who wrote to Adams, noted that Bailey had called "as soon as he became acting director and told me he had someone he wanted me to meet." According to Moore, that someone was Williams, who told Moore that he believed the institute's funds could be invested in a way that would earn more interest.

The institute, which provides funding for research projects for science and industry, operates within ADECA. Bailey signed the contract in his role as ADECA chief, records show. Siegelman and others also signed it.

Sterne Agee has been in the news since recent reports that it hired Williams to help it win a contract to manage a portion of the $1 billion Alabama Trust Fund, and to help it capture a similar contract for a far smaller fund held by the Alabama Crime Victims Compensation Commission. The Trust Fund is a repository for state natural gas royalties.

Members of the Police Officers Annuity Fund have also said they felt pressured by the administration to use Williams and Sterne Agee. Records show that, despite repeated requests, Siegelman did not sign contracts with the fund's longtime managers. But members of the fund refused to change their contracts.

The Birmingham News has reported that a firm Williams co-owns, AFS Equities Inc., handles the personal investments of Siegelman and former Siegelman chief of staff Paul Hamrick. The firm has for years invested Siegelman's multimillion-dollar campaign funds, state elections records show. AFS has made money for the governor's campaign - including $261,138 in 1999 and $217,252 in 2000, election records show.

Last year, when the stock market took a dive, so did the investment returns for the Siegelman campaign. The campaign's report of contributions and expenditures for 2001 showed a $287,996 loss on its investments with AFS in 2001.

Williams and Sterne Agee officials did not return calls seeking comment for this report, or for previous stories. Bailey, who resigned from the administration in late November, could not be reached.

The governor's representatives declined to comment for this story. (See the editor's note at the end of this article.)

Last month, The Birmingham News reported that records show Williams has been paid as much as $8,500 a month by Sterne Agee for helping the firm become one of the several investment companies to manage the massive Alabama Trust Fund. In a three-month period in 2000, Williams was paid about $14,000, including the month with the $8,500 payment, the newspaper reported.

A disclosure included with a recent renewal of a Sterne Agee contract shows that in 2001, the company was paid $23,195 from the Alabama Research Institute; $76,480 for its contract with the Finance Department's Division of Risk Management; and $111,657 for services provided to the Alabama Trust Fund.

Based on the percentages due Williams on the contract with Risk Management - which is the state self-insurance fund - it would appear that he has been paid at least $50,000 since June 2000 on that contract.

The records on the ADECA/Research Institute contract indicate that Williams would have been paid about $9,200 of the $23,195 that Sterne Agee was paid in 2001, and similar amounts in other years.

The Register's review of a smaller state contract with the crime victims fund doesn't show the financial terms of Williams' services as "relationship manager" for Sterne Agee on this contract. Fund records show that Williams was involved in seeking the business. Those records also show that Bailey and the governor's office were involved in that selection, and in the cancellation of the fund's contract with its previous investments manager.

State records going back to 1997 show Sterne Agee had no state contracts from then until 1999, Siegelman's first year in office. The firm has since won five contracts, but on one, Williams was not involved, said State Treasurer Lucy Baxley.

Going back years, to before Baxley was elected treasurer, an investments manager with Regions Bank, Jerry Harris, oversaw investments for the PrePaid Affordable College Tuition (PACT) Fund. In 1999, Harris left Regions to join Sterne Agee. In all the state contracts, Harris is named as the primary manager with Sterne Agee.

When Harris moved to Sterne Agee, the board that governs the PACT fund voted to move the fund's investments with him, Baxley said.

Williams was not involved in helping the PACT contract, said Baxley. PACT fund records don't mention Williams or Bailey, the Siegelman aide.

"The board has always been very happy with Jerry, so this had nothing to do with any of the other Sterne Agee contracts," Baxley said, noting that she has read some of the stories about Williams' role in other Sterne Agee contracts.

A similar situation existed with the Alabama Research Institute, records show. A letter in the institute's files from an ADECA official describes Harris as "the guy who managed the ARI trust fund for 10 years over at Regions."

"The board was very impressed with him. He used to dazzle them with his financial expertise," the letter states.

Given the institute fund's history with Harris, it's unclear why Sterne Agee would have needed Williams' help winning the contract, and would have agreed to pay him 40 percent of the money it makes from managing the fund.

Last month, The Birmingham News reported that state and federal investigators had subpoenaed Siegelman's banking and personal records as part of what the newspaper described as a wide-ranging probe stemming from state business that his administration awarded to companies with ties to his friends and supporters. Sterne Agee's records were among those subpoenaed, the paper reported.

(Editor's note: The governor's office has a stated policy of refusing to comment to Register reporter Eddie Curran. Anyone seeking to reach Curran can e-mail him at ecurran@mobileregister.com, or call 434-8636, or, long distance, 1-800-239-1340, ext. 636.)